Next story in Countdown with Keith Olbermann

KEITH OLBERMANN, HOST (voice-over): Which of these stories will you be talking about tomorrow?

The breaking news that the underwear bomber is cooperating again with authorities. What he‘s spilling is “current. The U.S. is aggressively pursuing it in Yemen.” Quoting an administration official, “This isn‘t stale. It‘s proving to be very valuable.”

So, he‘s talking even though we haven‘t hung him upside down in his cell, even though we read him his Miranda rights, even though we let have a lawyer, even though we didn‘t sell out our principles or our Constitution.

Sort of destroys the main Republican talking point on this, doesn‘t it?

“Don‘t ask, don‘t tell,” don‘t live up to your own words: 2006, John McCain says, if the military men told him it was time to end “don‘t ask, don‘t tell,” he‘d listen. Today.

(BEGIN VIDEO CLIP)

ADMIRAL MIKE MULLEN, CHAIRMAN OF THE JOINTS CHIEF OF STAFF: It is my personal belief that allowing gays and lesbians to serve openly would be the right thing to do.

OLBERMANN: So, they told him and he told them they were wrong and he won‘t listen to them anyway. Just lie about it. Pollster Frank Luntz who has promised he can get you any result you want writes a guidebook for defeating financial reform. Just lie and say it means more bailouts for Wall Street.

Little Jimmy Olsen O‘Keefe explains it all.

(BEGIN VIDEO CLIP)

JAMES O‘KEEFE, ACTIVIST: We‘re not stopping. Our goal is to expose the truth, expose corruption until it‘s gone. And that‘s it.

(END VIDEO CLIP)

OLBERMANN: Will that be before or after your trial?

And Beck again? Today.

(BEGIN VIDEO CLIP)

GLENN BECK, FOX NEWS: I said I‘ve never used the word “slaughter” on the air.

There‘s breaking news tonight about the man accused of trying to blow up Northwest Airlines Flight 253 over Detroit on Christmas Day. He is talking. More than that, we are learning tonight Umar Farouk Abdulmutallab, the alleged would-be suicide bomber, is giving up current, actionable information about the group al Qaeda in the Arabian Peninsula, without the U.S. using any of the methods approved by the Bush administration and defended to this day by the Republican Party. No waterboarding, no beatings, no sleep deprivation, no military commission, no dishonor to this nation.

Abdulmutallab is cooperating freely with the FBI, providing, quote, “very valuable intelligence,” a U.S. official says, the U.S. is now acting on it in Yemen—NBC News justice correspondent Pete Williams reports, after the U.S. government gave Abdulmutallab the rights enumerated in the Constitution: he has a lawyer, he got due process, he got his Miranda warning, he will get a trial. And NBC News chief White House correspondent Chuck Todd, quoting the senior administration official, says the FBI did it by going to Nigeria, and rather than threatening his family, getting their help. Members of the family flew to the U.S. on January 17th and helped the FBI get Abdulmutallab‘s cooperation.

Nevertheless, even though the shoe bomber, Richard Reid, got exactly the same rights from the Bush administration, this time, Republicans disapprove of this. Senator Lamar Alexander calling for the resignation of U.S. Attorney General Eric Holder, whose prosecutors are overseeing the case, and whose FBI agents first interviewed the man. Republicans are furious with Holder for the fact that Abdulmutallab stopped talking for a month, despite the fact that his agents in just an hour of questioning almost as soon as he landed in Detroit, got Abdulmutallab to reveal the key names and locations associated with the bomb plot.

Today, the FBI director, Robert Mueller, explained the concept behind Abdulmutallab‘s cooperation where Republicans not swift enough to follow an episode of “Law & Order.”

(BEGIN VIDEO CLIP)

ROBERT MUELLER, FBI DIRECTOR: We have found that the system of justice in the United States which allows for consideration of contributing intelligence and information and credit for that is a powerful incentive to persons to provide truthful, actionable information, evidence and intelligence. We have other countries that don‘t have the same system of justice, where there is no incentive to cooperate or provide intelligence, and the person stays in jail without any incentive to provide intelligence and without providing ultimately any intelligence.

ALTER: This was a big triumph for the rule of law and a lucky break for the Obama administration, if this had gone the other way, that he would have stayed on from the Republicans. This lets us say, as FBI Director Mueller did, that our system works. There is no fundamental clash between national security and our values, and that‘s the message the president has been trying to deliver since his inaugural address, and was reinforced tonight.

OLBERMANN: But you said, the Republican heat would have continued. Obviously, Pete King and Hoekstra and Giuliani are not going to say, “We were wrong, the system does work. We‘re sorry.”

ALTER: Yes.

OLBERMANN: I mean, even though that last “Washington Post” Poll said 62 percent specifically approved the way Obama had handled the Detroit case before this development, where, gosh, the system works and cooperation with the family turns out to be more valuable than, you know, trying to drown the man. They‘ve been selling, the right has, Obama‘s soft on terror meme.

What pushback will they offer and from which orifice will they pull it?

ALTER: Well, I‘m not going to hazard a prediction on the last one.

OLBERMANN: All right. Just give me the first one, we can all guess the second one.

ALTER: You know, I think they‘re in a place now where they just want to hurt Obama.

ALTER: And what they don‘t get, I wish they would look into their souls a little bit, is that if they convey over and over again that the president of the United States is weak, what does that do? It emboldens the terrorists, and I don‘t say that lightly.

But think of—think of terrorists overseas and—or at home, who might be plotting an attack. If they think that the president is weak, which he is not. He‘s manifestly not. He‘s killed twice as many of them, not to put too fine a point on.

OLBERMANN: Yes.

ALTER: . with these Predators, as his predecessor did.

He‘s not weak, if they continue to convey that he is weak, that gives serious help to the terrorists. So, I think the pressure should now be on these Republicans—aren‘t you helping the terrorists by insisting against all evidence? Remember, we have 100 percent conviction rates of terrorists in civilian courts in this country -- 100 percent. It‘s not like any of them are out.

OLBERMANN: Yes.

ALTER: . walking the streets as we‘re—as we‘re told. The only detainees from Guantanamo who have been released and have returned to terrorism in their home countries were released under President Bush.

OLBERMANN: Yes.

ALTER: So far, there‘s not been one case of that happening under President Obama. So, this line is a bunch of hooey and they have to stop saying it, and the onus now needs to be on them for whether or not harming us as they continuing to do so.

OLBERMANN: I find myself in a very unusual position on one point though. Is there—and I‘m—I was—the person most aggravated and insulted by the rapidity and stupidity with which the Bush administration would trumpet their own successes of stopping terrorist plots that have no more sophistication than using Mentos to blow and Diet Pepsi to blow up the moon.

But he‘s been talking since Thursday, he—since Thursday of last week, is it incumbent to some degree under these political circumstances, even for this administration, with its very laid back attitude towards, oh, we stopped this, we stopped that, to say something a little more loudly to make this point under these circumstances that the system works?

ALTER: Well, you know, this case has not been completed. Let‘s see how it‘s resolved. Apparently, they cut a deal where he—you know, he won‘t face the death penalty in exchange for his testimony.

And so, I don‘t think they need to get out there and start bragging about the case, but it‘s important for people to understand that this is a good development. Lamar Alexander wants Holder to resign? Does he want Mueller to resign, too.

OLBERMANN: Yes.

ALTER: . who was appointed under President Bush?

OLBERMANN: Yes.

ALTER: Does he want the others who have been standing up for the rule of law?

Look, reasonable people can disagree on whether Khalid Sheikh Mohammed should be tried in New York City, which apparently is not going to be. There‘s all sorts of areas for legitimate debate on how we handle terrorism. But let‘s not cast these aspersions on people‘s motives, let‘s not call people “soft,” that‘s just has to be end.

OLBERMANN: NBC News can‘t confirm the story that there was a deal cut. Certainly, he doesn‘t face the death penalty. But is that where the Republicans will come back, like, we‘re not going to get to hang him? We‘re not going to get to execute him? We‘re not going to get.

ALTER: Yes.

OLBERMANN: But—and the point to that, of course, is, don‘t you want that out in a terrorist‘s mind at the last moment? If I chose—if, you know, something caused Richard Reid, as an example, not to go into the bathroom where he would have been able to destroy that plane without anybody interfering with him, to stay in his seat and try to light his shoes on fire with people sitting all around him. Some doubt exists in his mind.

Don‘t you want to reward that doubt by saying, “If you don‘t do it and you cooperate, we‘re not going to kill you; if you don‘t want to kill yourself, we‘re not going to kill you for you”?

ALTER: Yes. I mean, you want to use every tool at your disposal, in the same way that what apparently has gotten this guy to talk is that his father tried to warn the embassy about him, you know, was brought over, his family was brought over. Now, if you were in a—in a military situation, that would not happen.

OLBERMANN: Exactly.

ALTER: Don‘t we want our interrogators to have a lot of different tools to use? Why would we want to create a system where they can only waterboard, when under torture—as we know from John McCain and others—people will say anything to stop the torture whether it‘s reliable or not?

OLBERMANN: Because Republicans want people in this country to live in the world of the show “24.” Not the real world where you have to negotiate and you get the information and you quietly roll things up rather than blow them up.

Jonathan Alter of MSNBC and “Newsweek” as we tried to out-heat each other here, good to see you. Thanks, Jon.

ALTER: Thanks, Keith.

OLBERMANN: From another Senate military hearing today, it was the Republican Party line on all Bush-era defense issues. Listen to the generals, what they said went until, of course, a Republican was no longer the commander-in-chief; until, of course, Commander-in-Chief Obama called for a repeal of “don‘t ask, don‘t tell” in his first State of the Union address last week; until his military leaders went before the Senate this afternoon and said, it is time to scrap “don‘t ask, don‘t tell.”

That‘s when the top Republican on the armed services committee said this.

(BEGIN VIDEO CLIP

SEN. JOHN MCCAIN ®, ARIZONA: Numerous military leaders tell me that “don‘t ask, don‘t tell” is working and that we should not change it now. I agree.

OLBERMANN: In 2006, on this network, Senator McCain having said the exact opposite about “don‘t ask, don‘t tell.”

(BEGIN VIDEO CLIP)

MCCAIN: The day that the leadership in the military comes to me and says, “Senator, we ought to change the policy,” then I think we ought to consider seriously changing it, because those leaders in the military are the ones we give the responsibility to.

(END VIDEO CLIP)

OLBERMANN: Well, guess what? This is tomorrow, McCain making today‘s blanket declaration about military leaders on “don‘t ask, don‘t tell,” before the military‘s top uniformed officer, Admiral Mullen, chairman of Joint Chiefs, had been given the chance to speak—including especially the chance to say this.

(BEGIN VIDEO CLIP)

MULLEN: It is my personal belief that allowing gays and lesbians to serve openly would be the right thing to do. No matter how I look at this issue, I cannot escape being troubled by the fact that we have in place a policy which forces young men and women to lie about who they are in order to defend their fellow citizens.

(END VIDEO CLIP)

OLBERMANN: That would be the leadership of the military coming to you

and saying, “Senator, we ought to—no matter how you look at this issue -

Once the questioning began, Senator McCain angry that the military had not consulted him first.

(BEGIN VIDEO CLIP)

MCCAIN: Fortunately, it is an act of Congress, and it requires the agreement of Congress in order to repeal it. And so your statement, obvious is one which is clearly biased, without the view of Congress being taken into consideration.

(END VIDEO CLIP)

OLBERMANN: Sweet and never mind.

Let‘s turn to Lawrence Korb, assistant secretary of defense under Ronald Reagan, now a senior fellow at the Center for American Progress.

Thank you for some of your time tonight, sir.

LAWRENCE KORB, CENTER FOR AMERICAN PROGRESS: Nice to be with you.

OLBERMANN: Is changing “don‘t ask, don‘t tell” something we ought to be giving serious consideration, too, now that our military leaders have said it‘s time for the policy to change? Or is that something that should only happen when a Republican is president?

KORB: Well, I mean, it‘s something that should have happened quite a while ago. And the interesting thing is that even the majority of conservatives now support changing the policy. And Senator McCain, three years ago, had a chairman who basically did not want to change the policy, in fact, did not even want to have gays in the military at all.

So, I think he thought he had political cover, and I think Admiral Mullen‘s statement took everybody by surprise today, especially Senator McCain.

OLBERMANN: We were told time and time again during the Bush administration, we need to listen to the generals, particularly the generals on the ground. Does that apply only to Iraq, or when broad policy decisions are being made about the military, the general is somehow uninformed?

KORB: Well, I think what they were doing—the Republicans said we ought to listen to the generals because some of the generals were saying what they wanted to hear. But, for example, when Senator McCain was saying, “Well, we can muddle through in Afghanistan,” the generals there were saying, that‘s not working. But he didn‘t want to hear that, because he was so focused on Iraq.

And what happens is, you try and get political cover for what you want to do by theoretically relying on the experts. But what happens when you open that door, then the experts change, then you got a big problem. And Senator McCain had a big one today, particularly since on the hardball tour three years ago, he took the opposite position.

OLBERMANN: The defense secretary, Mr. Gates, said, it would take—could take two years to implement the change to “don‘t ask, don‘t tell.” Why so long, and would that period of time not allow for plenty of time for congressional opponents to make sure the policy stays in place, or for Mr. McCain, 10 to 12 opportunities to change his mind again on this?

KORB: Well, there‘s no doubt about the fact that if you take that long, not just in the Congress, but, you know, some people in the military. And if you look at the experience of other countries who doesn‘t have to be that way—in 1999, the European court told the British military, which is very similar to ours in terms of submarines and they go—you know, expeditionary forces, they were—they were told you got to change the policy. The British changed it right away, just changed it.

So, you can—you can—you can do that, and I think that‘s what we have to be very careful of, that people don‘t try and slow-walk this thing, and, you know, keep the pressure on them. I‘m hopeful that in this year‘s defense authorization bill, they can put an amendment on there that will change the policy.

OLBERMANN: Yes, like we have to phase-out lying in the military.

Lawrence Korb, former assistant defense secretary under President Reagan, now at the Center for American Progress—great thanks for your perspective.

OLBERMANN: As the fate of health care reform also hangs in the balance in Congress, another reminder of the crucial need for reform, the fourth free clinic funded by you, our COUNTDOWN viewer, tomorrow in Hartford, Connecticut. You can go to FreeClinics.us or COUNTDOWN.MSNBC.com to schedule an appointment.

If Mr. McCain has turned the “party of no” into the party of no personal integrity, add in Frank Luntz‘ advice to just lie about financial reform, and you get Michele Bachmann‘s warning to Minnesota: complain about health care reform, and you‘ll get put on a list in Japan. It‘s the Mikado all of a sudden.

Luntz, next; first, a “Quick Comment” on Bachmann.

(COMMERCIAL BREAK)

OLBERMANN: And now, tonight‘s first “Quick Comment”—between John McCain‘s self-contradiction and Frank Luntz‘ advice, just lie, which we‘ll talk about in a moment.

The Republicans are slowly revealing their newest policy: say anything

because they believe that the Republicans to whom they are talking are literally so stupid that they‘ll believe anything.

Michele Bachmann, who has mentally not been on this planet for at least three years, told a small gathering in Rochester, Minnesota, this terrible secret: some guy stopped her and told her he used to live in Japan. She didn‘t get his name or nothing. But he told her, quote, “In Japan, people have stopped voicing their opinion on health care,” he said it‘s because they know they would get on a list, and then they wouldn‘t get health care, they wouldn‘t get in, they wouldn‘t get seen.

And so, people are afraid. They‘re afraid to speak back to government. They‘re afraid to say anything.

Is that what we want for our future? That takes us to gangster government at that point.

So if you criticize American health care, you get on a list in Japan? Or if you criticize American health care you get on a list in America? Or Michele Bachmann just believes every random stranger who comes up and tells her a story about Japan, and she assumes it‘s going to come true here?

As to health care reform, the congresswoman concluded, “I will fight it until my last breath.” OK.

(COMMERCIAL BREAK)

OLBERMANN: The short version of the advice from pollster/strategist Frank Luntz to Republicans moving from trying to kill health care reform to trying to kill financial reform: lie about it. Paint it as a massive government takeover—again.

Only time, the pollster behind the strategy is so enamored with his own influence that evidently he has leaked his own memo. You may recall that even President Obama at the GOP retreat recognized that Republicans get their poll tested wordage from Frank Luntz, the GOP pollster and strategist.

And in a new 17-page guide book obtained by the “Huffington Post,” Luntz details how opponents of finance reform can kill it by portraying that reform as punishment for taxpayers and a reward for big banks and credit card companies—even though the opposite is true of financial reform. And while Luntz fancies himself the Yoda of Republican obstructionism, his real motivation is, in fact, slightly more crass.

As Think Progress notes, just look at his client list. It includes Merrill Lynch, Bear Stearns, American Express, Ameriquest Mortgages.

The proposed Consumer Financial Protection Agency would eliminate predatory mortgages. It would police the kinds of financial products that nearly brought down the entire economy and it would regulate the credit card industry, including its predatory interest rates and fees.

Don‘t think for a second that those corporate clients want any of that. As for why? We know they work, whether created by Luntz or Sarah Palin or Michele Bachmann, or insert name here, Betsy McCaughey.

Just look at how Republicans responded in a brand new poll to which we briefly referred last night -- 63 percent of Republican respondents believing that President Obama is a socialist. Nobody asked if you could define that term. Thirty-six percent of them, the plurality, believe he was not born in the United States. Another 22 percent not sure.

Twenty-one percent think ACORN stole the election—even though Obama won by the largest margin since Ronald Reagan and no one explains how they would have stole it. And 39 percent of these respondents think Obama should be impeached for something.

Let‘s bring in the former deputy campaign manager for President Obama and current head of Hildebrand Strategies Consulting, Steve Hildebrand.

Thanks for your time tonight, Steve.

STEVE HILDEBRAND, FMR. OBAMA DEPUTY CAMPAIGN MGR.: Thank you, Keith.

OLBERMANN: The thrust of the Luntz memo is to take economic anxiety and anger at the big banks and to paradoxically channel this into opposition to bank and finance regulation. Is that a fair characterization, what he and the right-wing are already doing on this?

HILDEBRAND: Sadly, Keith, it is. It‘s—you know, what Frank Luntz and the Republican Party is doing is playing reckless havoc with the American people. They should be ashamed of themselves. They should get their act together and take back a position in this country where they can provide some political leadership. This is a disaster waiting to happen.

OLBERMANN: Are Democrats not very skilled at combating the nonsense?

And do you—do you have a handle on why that might be if it is the case?

HILDEBRAND: I think our president is very skilled at it.

OLBERMANN: Yes.

HILDEBRAND: You know, I think every Democrat in the country, every political leader in the country on the Democratic side, ought to be raising hell about this memo. And, you know, they should be calling on these corporations to fire Frank Luntz. They should be calling the Republicans to distance themselves from Frank Luntz.

But we also got to look at who funded that research and that memo, and call them on the carpet, too. You don‘t go out in a strategic way and try and kill financial reform that is desperately needed for the American people. The people that are hurting the most, we‘re going to hurt them even more with this strategy that Frank Luntz and the Republicans are trying to enact.

OLBERMANN: And a couple other lies from this memo, said the Consumer Protection Financial Agency would be headed by a czar, even though the position would have to be confirmed by the Senate and nobody uses the term “czar” except the Republicans. Luntz also said that finance reform opponent should pound at loopholes like the exemption for auto dealers. That was introduced by Republican congressman named John Campbell.

Is there any expectation that this sort of stuff won‘t be effective once again?

HILDEBRAND: Well, I just think they‘re crazy to even try this

strategy. You know, these politicians—and Republicans are more

notorious about it than anybody—they need to stop worrying about their

re-election and get to work for the American people who are hurting in this

country.

Our country is on the brink of catastrophe if we don‘t get moving. And Washington should be held accountable for it, and these Republicans should be ashamed to have this strategy in place. And Frank Luntz‘ clients, Ameristar and Bear Stearns and these others—they like those loopholes in this bill. I‘m not sure why they‘re trying to kill it, but it seems a little bit on the odd side.

OLBERMANN: This also addresses another catastrophe in a different direction, to the recent Supreme Court decision in the Citizens United case, if Luntz does bidding for corporate clients where there are still some breaks on the system, can we see what—are we getting an idea of what the system might look like without those breaks, with more corporations pouring more money and taking over politics?

HILDEBRAND: Boy, Keith, this is—this is disturbing and, you know, this is where I got to go bipartisan a little bit. Democrats and Republicans both need to get behind reform. They need to reform the finance—the campaign finance system in this country. They need to do everything they can to reduce the influence of money in politics, because it‘s gotten so out of control.

With this Supreme Court decision, corporations have the ability now to put unlimited amounts of money into campaigns to elect or defeat a candidate. And you‘re going to see the likes of ExxonMobil and their $45 billion profits and Goldman Sachs and their $12 billion profits being used to buy Washington in an even bigger way than they already have bought it.

OLBERMANN: Speaking of which, if you have been watching carefully for the last week, you will have noticed another Obama campaign just underway. Could the secret to saving the nation from the “party of no” and the “party of no principles” be a new invention called “facts”?

(COMMERCIAL BREAK)

OLBERMANN: Little Jimmy Olson O‘Keefe keeps talking about his future journalistic career, as if he had one, or as if he had one previously.

Since, I heard somebody talking about how great it was that they had a holiday for that movie, you know, “Groundhog Day,” on this date sometime in the late 1700s, the first Groundhog Day was celebrated in the German communities of Central or Western Pennsylvania. The first one in Punxsutawney was in 1885. But there‘s a reference to one in Berks County, PA, in the diary of a store keeper there named James Morris. That‘s dated February 5th, 1841.

Let‘s play Oddball.

We begin with the Groundhog Day weather whip and groundhog roundup. Countless American towns and villages now cashing in on the weather-casting ability of buck toothed rodents. Punxsutawney Phil in Pennsylvania was the originator. He did see his shadow this morning, even though it was completely clouded over. Might have been the lights. That means six more weeks of winter, or lights.

Except General Beauregard Lee in Georgia didn‘t see his shadow, so we‘re back to even. Charles G. Hog from Staten Island didn‘t bite the mayor and didn‘t see his shadow. We‘re still at even. We‘re actually at negative six now. Lastly, also no shadow for Sir Walter Walley in North Carolina. So summer apparently arrives in March.

By the way, on the Internets, paranoid Punxsutawney Pete says we‘ll have six more weeks of intrigue.

Sydney, Australia, hello. We go behind the news for the real news room no-no. During an afternoon broadcast of Sidney‘s Channel Seven news, a financial analyst for the Mochrie (ph) bank was on to discuss Reserve Bank interest rates. Except the guy on the computer in the upper left there, he was not interested in Interest rates. He was using his workstation to view soft-core porn. Viewers paying extremely close attention saw the worker checking out a semi-nude woman during his colleague‘s report.

The incident has been brought to the attention of the bank management. Says they‘re dealing with the issue internally, and the woman has been brought to the attention of Fox News management. We‘ll see her on the air next Tuesday.

The president on the road again, trying to radicalize this nation by the forced imposition of democracy, next.

(COMMERCIAL BREAK)

OLBERMANN: Freshly energized from the State of the Union and his nose-to-nose encounter with Congressional Republicans, the president hits a town hall in Nashua, New Hampshire, in what suggests the outline of the new traveling war of facts tour. In the Granite State, the president taking questions from voters. But, once again, engaging his Republican opposition by painting it as political opportunists willing to switch positions at will just to score points. The president urging lawmakers to work together to get things done for the American people. Remember them?

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It‘s one thing to have an honest difference of opinion on something. There‘s nothing wrong with that. But you can‘t walk away from your responsibilities to confront the challenges facing the country because you don‘t think it‘s good short term politics.

We can‘t afford that. We can‘t afford that.

The message you all sent when you elected me, the message that was sent this past month, whether you‘re Democrat, Republican, independent, you‘re out of patience. You‘re out of patience with this kind of business as usual. You want us to start worrying less about our jobs and more about your jobs.

(END VIDEO CLIP)

OLBERMANN: The president set for another round of question time with lawmakers this week, this time with the Senate Democratic Caucus tomorrow morning. Majority Leader Reid‘s office telling the “Huffington Post” that cameras will record Obama‘s remarks tomorrow and will continue to roll once the questions begin.

The president‘s desire to pass a jobs bill this year already seems to be heading down the same path as health care reform. Chairman Baucus of the Finance Committee telling Democratic leadership that he would like a crack at marking up the jobs bill before Democrats give any thought to trying to pass one. Numerous Senate aides telling TalkingPointsMemo.com that the jobs bill is and would be different, the House having already passed a jobs bill, and a good one at that. Anyone notice it‘s Groundhogs Day.

Time now to call in David Corn, Washington bureau chief of “Mother Jones Magazine,” also a columnist for PoliticsDaily.com. David, good evening.

DAVID CORN, “MOTHER JONES MAGAZINE”: Good to be with you, Keith.

OLBERMANN: The State of the Union, the House Republican meeting, Nashua—has it become clear that the White House has a new strategy four going its opponents with these unusual things called facts?

CORN: I think Obama is on the offensive. It‘s sort of game on for Barack Obama once again. I think Massachusetts was, indeed, a wakeup call to the White House, and perhaps caused them to reevaluate their legislative and political strategy of the past year.

I think Obama is trying to address two constituencies at once. One is the American public who indeed—many of whom are out of patience or worried. They see unemployment high, even if the economy has grown a lot in the last quarter. And they see big bailouts. The other constituency that Obama is aiming at is the Democratic senators. He wants to basically show them that he can be a strong political leader, and can be of help to them in the fall, and get them to pass this health care reform bill within the next couple weeks.

I mean, I think this whole tour that he‘s on now is about demonstrating, once again, that when he wants to, he can indeed grab ahold of some of those independent voters out there, and he can mobilize the base, and keep that coalition together, jazz it up, and give these Democratic senators a little more security about what they believe, rightly are or wrongly, might be a hard vote on health care.

OLBERMANN: So what should we expect out of the question time tomorrow with the Democratic caucus?

CORN: Well, probably less confrontational than the one that we saw on Friday, which was pretty breathtaking, with Obama versus the House GOP. I thought it was great. In fact, I think there are going to be a bunch of conservative and liberal bloggers and political activists in the next day or two calling to have those things on a regular basis. Nevertheless, I think tomorrow morning, he‘s going to appear before the Democratic senators. And I hope he asks them, hey, what are you doing with health care? And when are you going to pass this?

Letting this sort of—letting this get stuck in the muck for too long, again, letting the jobs bill go back to Max Baucus, who, last we saw, took forever to mark up a health care bill and slowed down the process, is not going to be successful, I think, for the Democrats overall.

Obama is still their star, still the leader of the team. To the degree that he can take whatever shine he has, and put it on what the Senate and the House is doing, it can only help the House Democrats and the Senate Democrats. So I think he missed an opportunity to do that with the health care bill a year ago. He has to do that with the jobs bill now, and they have to let him do that.

anyway, after the Republican event, that the president‘s learning curve was

should be a frightening thing to Republicans. How does it tangibly—what is he doing differently, as opposed to a year ago, with—fill in the topic of which policy it is. But just materially, politically, strategically, what does he do when he says to them, do something and they don‘t? How does he make it actually happen?

CORN: Well, far be it for me to add what Chris says, because he‘s the “HARDBALL” expert here. I think he has—a lot of this is—it‘s frightening to say so. A lot of it is personal relations, particularly when it comes to senators. Every senator believes that he or she should be president of the United States, and they expect to be catered to a bit. You have to be able to do that, while at the same time putting the pressure on and showing—demonstrating to them, as I said earlier, that I can help you win elections and stay in your job.

So that‘s what he‘s doing now. But I think at some point, he has to sit down with Max Baucus, and say—he has to be very clear and say, we can‘t repeat with the jobs bill what happened last Spring with the health care bill, and that‘s just it, no ifs, ands or buts about that.

OLBERMANN: David Corn, Washington bureau chief for “Mother Jones.”

Great thanks, David.

CORN: Thanks, Keith.

OLBERMANN: Little Jimmy Olson O‘Keefe, scoop news boy, now explains he does not know the difference between a US senator taking a bribe and a US senator winning funding for her state.

Not just another denial by Glenn Beck about using the word slaughter, but a denial that contradicts yesterday‘s denial.

And when Rachel joins you from Washington, at the top of the hour, the Don‘t Ask Don‘t Tell hearings as she witnessed them, and a service man about to lose his job because of a policy based on forcing American heroes to lie.

(COMMERCIAL BREAK)

OLBERMANN: Now the second of tonight‘s quick comments, and a quick visit to the land of the former half governor of Alaska, the world‘s foremost taker of umbrage, Sister Sarah. She‘s called for the White House to fire Chief of Staff Rahm Emanuel after his unacceptable use of a term which Miss Palin aptly describes as offensive to special needs kids and their families.

In doing so, she has done three things: she has proved once again that she will use her kids for political hay, at any time, under any circumstances; she has reminded us all that her ex-future son-in-law, whom she also once used for political hay, quoted her as having called her own youngest child her, quote, retarded baby, unquote; thirdly, her credibility is so slight, she‘s probably just guaranteed Mr. Emanuel his job for life.

But perhaps her real intent in going after Emanuel‘s bone-headedness has failed. She was trying to divert attention from her latest skivvy scandal, in which she has used 63,000 dollars of contributions to her political action committee to buy copies of her own book wholesale from her publisher and give them to donors. The blog “Hot Air,” one of the greatest sources for sophistry on the web, says this is no big deal because it would only involve about 4,700 books.

The numbers of books is not the question. It‘s the royalties on the books. At her publisher, Harper Collins, a division of News Corp, an author can set themselves up as a special sales client, buy their own book in bulk, and then the author gets a 10 percent royalty on the deal.

In other words, there‘s a way for Sarah Palin to tithe all the donations to her political action committee and keep it for herself. It‘s only 6,300 dollars. And, of course, this is not the kind of person who would do something unethical for only 6,300 dollars.

The bronze to cluster-Fox and Friend, who led the right wing panic over this photograph, US President Barack Obama bows to Tampa Mayor Pam Iorio at MacDill Airforce Base on Thursday January 24th. Said Gretchen Carlson‘s back up -- now, there‘s a sad job. Gretchen Carlson‘s backup, Alisyn Camerota, “what is going on here?” Steve Doocy referred to previous presidential bows, “there he is with the emperor of Japan. There he is—

I think that‘s with the queen, isn‘t it? And we got some other. The next is the king of Saudi Arabia.”

Camerota, “we‘ve seen it too many times now. This is a little strange habit.”

It‘s a bow. What were you raised in a barn? Show the argument ending photo, please. This is Richard Nixon. He‘s bowing to the emperor Japan, only the emperor of Japan he is bowing to is Hirohito, the one who authorized the bombing of Pearl Harbor. International diplomats bow to each other. And sometimes men bow to women.

Our runner up, Lonesome Roads Beck. The trivia first, “now, last night on the network that nobody watches—I don‘t think the cameramen are watching now. Bernie, are you watching? What‘s his face got on. Bernie‘s not watching. What‘s his face got on with Arianna Huffington and said, we have to correct the record here. We‘ve got to make sure that everyone knows there are standards.”

The attacks on me and this show and on you for watching it tend to rotate. He said this, he said that, then they always come back to the ratings. Beck did this. The “National Review” did this. A site called “Daily Finance” or “Finance Daily” did this. Give me 17 seconds to clear this up, quickly. COUNTDOWN up five percent in January from December at 8:00 pm, up six percent at 10:00 pm. The 8:00 pm show beat CNN by 27 percent, and it beat Headline News by 24 percent. It‘s the highest rated cable show not on Fox News, meaning, you know, it‘s the highest rated actual cable news show. Thank you for indulging me.

Now to the meat of the thing, our winner, Lonesome Roads Beck. Today, “on yesterday‘s broadcast I said I never used the word slaughter on the air, never used it on the air, because I‘m pretty sure I would remember saying the administration was slaughtering people, was going to slaughter people.”

Yesterday, “I don‘t know if I‘ve ever used the word slaughter, and if

I used the word slaughter, it wasn‘t in the context of Mao, Stalin or

Hitler. It was in the idea that the truth is being slaughtered by this

administration, not saying that this administration is going to slaughter

GLENN BECK, FOX NEWS ANCHOR: I told you yesterday, buckle up your seat belt, America. Find the exit, there‘s one here, here and here. Find the exit closest to you, and prepare for a crash landing. This plane is coming down, because the pilot is intentionally steering it into the trees. They are taking you to a place to be slaughtered.

(END VIDEO CLIP)

OLBERMANN: Yep, he‘s right, he never said the word slaughtered. He‘s not even named Glenn Beck. He‘s not on television. We‘ve always been at war with East Asia. Glenn “Did you ever get the feeling some people just stop trying” beck, today‘s worst person in the world.

(COMMERCIAL BREAK)

OLBERMANN: In a few days, the right wing will have its story straight about right wing activist James O‘Keefe, so make sure you remember today, because they haven‘t quite got their stories straight yet. Last night, O‘Keefe gave his first interview since his arrest on charges he tried to interfere with a senator‘s phone. He gave it to Fox News. O‘Keefe still describes his action as journalism, even though his publisher denies knowledge of the plan, even though he was prodded about his wisdom by Sean Fricking Hannity.

(BEGIN VIDEO CLIP)

SEAN HANNITY, FOX NEWS ANCHOR: Did you have issues with the fact that this is a US senator‘s office, versus, for example, going into Acorn. As a US Senator, this is a federal building. This is federal property. You‘re going to federal phones. Did that enter your mind prior to going into this office?

Generally speaking, it‘s the people‘s office. It‘s—these are representatives of our country. We deserve to find out if they‘re accepting 300 million dollars in money. We deserve to find out what‘s going on, why the people of Louisiana couldn‘t get through to her.

(END VIDEO CLIP)

OLBERMANN: Of course, most journalists know the difference between accepting money, which Senator Landrieu did not, and winning funding for your constituents, which she did. O‘Keefe need not consider such critiques because the media is out to get him.

(BEGIN VIDEO CLIP)

HANNITY: Are you now calling on the rest of the media, that you feel has wrongly reported this, because they didn‘t have any of the facts and they ran with this, and they tried to politicize it? Do you think that was because of your Acorn work, number one?

O‘KEEFE: I‘m probably willing to bet it was.

(END VIDEO CLIP)

OLBERMANN: Shepherd Smith, the day after O‘Keefe‘s arrest, quote, “it sounds as if what they‘re saying is they‘re looking for some Acorn hanky panky and they tried to tap into Mary Landrieu‘s phone to get it.” O‘Keefe‘s patron in everything like this, Andrew Breitbart—shouldn‘t he have to be forced to pronounce his neat Breitbart—now says O‘Keefe‘s prosecution is part of a Justice Department plot to avenge Acorn. O‘Keefe tweeting that US Attorney Jim Letten recused himself after Breitbart blew the whistle, despite the fact Letten recused himself last month.

Breitbart might also want to get his accusations straight with O‘Keefe, who had this to say last night.

(BEGIN VIDEO CLIP)

HANNITY: At any point were you held without the opportunity to get an attorney?

HANNITY: But your answer is—but you say you‘re cooperating with the attorneys?

O‘KEEFE: Yeah, we have no complaints about the way the US attorney is handling this case.

HANNITY: None at all?

O‘KEEFE: I have no complaints—

HANNITY: Do you have any complaints about your arrest?

O‘KEEFE: I have no complaints about the way the US attorney is handling this.

(END VIDEO CLIP)

OLBERMANN: With right winger Ben Stein writing, “free James O‘Keefe” and others wailing about the civil liberties hell O‘Keefe has endured, O‘Keefe himself opened up about exactly what kind of abuse has these right wingers crying for mom.

O‘KEEFE: Jail was—the food was terrible. The applesauce was like water.

(END VIDEO CLIP)

OLBERMANN: There you go. Let‘s turn to Karl Frisch, senior fellow at Media Matters. Thank you for your time, sir.

KARL FRISCH, MEDIA MATTERS SENIOR FELLOW: Thanks for having me.

OLBERMANN: O‘Keefe repeatedly, and Hannity helped him on this, cited NBC‘s “Dateline” and CBS‘ “60 Minutes” as templates for what he does. Politics aside, purely as journalism, can you explain the difference to him.

FRISCH: I don‘t think O‘Keefe would know what real journalism was if it bit him on the rear end. A real investigative journalist—perhaps he could get an internship with Mike Wallace or Chris Hanson—a real investigative journalist seeks evidence and once they get that evidence, they let that evidence dictate what their story.

O‘Keefe does the exact opposite. He comes up with an idea. He seeks the evidence to prove that idea and then runs with it. That‘s not investigative journalism. That‘s right wing hackery.

OLBERMANN: There‘s no question, one point that was raised in his defense, although it‘s kind of tangential—but some of the initial reporting on O‘Keefe and the arrest in Landrieu‘s office turned out to be wrong, including on Fox News. Using his rationale, Fox News was punishing O‘Keefe for targeting Acorn?

FRISCH: We‘re still waiting for O‘Keefe and his mentor, Andrew Breitbart, to call for corrections on the “New York Daily News” and Fox News. I bet the irony is lost on them that even Andrew Breitbart‘s own website ran a wire story with the incorrect information in it. You don‘t see anybody yelling.

I think, ultimately, the question we should be asking is what did Breitbart and Fox News know, and when did they know it.

OLBERMANN: O‘Keefe told Hannity last night that he‘s at work on new projects. He‘s already being sued by Acorn for taping people without permission, in at least one state where that literally is illegal, clear as a bright line, no pun intended there, in Maryland. He has a court date for these criminal charges on the 12th of this month. Any guidelines for his future journalism you‘d like to share?

FRISCH: First, I never thought I‘d see the day that a right wing hack like O‘Keefe would essentially plead the fifth in a softball interview with Hannity. What‘s it‘s looking to shape up as is a wild conspiracy theory, where the attorney general got the US attorney‘s office to hold O‘Keefe, so they could convince the entire media to come up with a story against him, all to cover for Acorn. I‘m still waiting to see how Sasquatch and Obama‘s birth certificate fit into this.

OLBERMANN: It‘s just amazing. Apparently, they convinced O‘Keefe to go into the senator‘s office with something untoward in mind, too. So O‘Keefe was part of his own conspiracy theory to take himself down?

FRISCH: Well, you know, it is the people‘s office. And I live in DC. We have the people‘s zoo. So I‘m going to have a couple friends dress like zoo-keepers, so I can pet a panda.

OLBERMANN: You monitor media coverage. Do the same people who were demanding lawyers for O‘Keefe within 24 hours make the same demands on behalf of brown people sold to US troops for bounties overseas.

FRISCH: I think you‘re not likely to see that kind of coverage on these conservative hack outlets. The real question here is—O‘Keefe told a right wing student publication that if you do this kind of stuff, if you take calculated risks, you‘ll be rewarded. That‘s the life lesson he learned from Andrew Breitbart, and that‘s ultimately who shares in the responsibility here.

OLBERMANN: Karl Frisch from Media Matters, great thanks, and have a good night.

OLBERMANN: And you too at home. That‘s COUNTDOWN. In the immortal words of Ted Baxter, good night and good news.

Now, after witnessing the Don‘t Ask Don‘t Tell hearing today and to—the timing on that—I don‘t know how I‘m doing this. It‘s like lightning and three seconds later, there‘s thunder. To interview another American hero who is about to lose his job because this lie-based policy, ladies and gentlemen, here is Rachel Maddow. Good evening, Rachel.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

END

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